Freemium is a business model by which a product or service (typically a digital offering such as software, media, games or web services) is provided free of charge, but a premium is charged for advanced features, functionality, or related products and services. The word "freemium" is a portmanteau combining the two aspects of the business model: "free" and "premium".
The business model has probably been in use for software since the 1980s, partic...
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Freemium is a business model by which a product or service (typically a digital offering such as software, media, games or web services) is provided free of charge, but a premium is charged for advanced features, functionality, or related products and services. The word "freemium" is a portmanteau combining the two aspects of the business model: "free" and "premium".
The business model has probably been in use for software since the 1980s, particularly in the form of a free time- or feature-limited ('lite') version, often given away on a floppy disk or CD-ROM, to promote a paid-for full version. The model is particularly suited to software as the manufacturing cost is negligible, so – as long as significant cannibalization is avoided – little is lost by giving it away for free.
However, this term for the model appears to have been created only much later, in response to a 2006 blog post by venture capitalist Fred Wilson summarizing the model:
Give your service away for free, possibly...
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